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(Editor's note : This post also contains the full Parliamentary exchange when the announcement was made)

By Nick Watts, Great North News Services

The decision, announced today, to press ahead with the purchase of the F35B is instructive. Coming as it does shortly after the MOD's White paper on Technology, Equipment and Support for UK defence and security it tells us much about the UK's ability to provide sovereign capability. The obvious headlines about U turns miss the wider point.

 



The original decision to choose a Short Take Off and Vertical Landing (STOVL) variant made sense in the context of its time. The UK had a well developed understanding of STOVL operations. Industrially it made sense too, since other partners in the JSF project would be using this variant, which would offer interoperability into the future after the Harriers were retired. The subsequent history of this programme was one where the take off weight of the STOVL variant was increasing, reducing its operational capability. Suddenly the conventional version began to make more sense.

 

The decision to reverse the decision to buy the STOVL version opened other doors; interoperability with both the US and French navies. But at this point the evolving technology of the new catapult launch system began to cause anxiety. Modern ships are driven by electric motors so the old steam powered catapults would not be suitable. At this point the equation becomes very complex. A re-design of the CVFs would be needed; the first ship would come into service without the catapult launch system. The aircraft itself is still evolving. Suddenly the programme is teetering on the edge of confusion.

 

At this point inter service rivalry steps into the picture. One option would be to press ahead with the conventionally launched F35-C. In the absence of which the UK could acquire F18s to provide carrier borne capability. This defies the logic of choosing to participate in the F35 programme in the first place. MOD's ambition is to reduce the different types of aircraft it operates for efficiency reasons. The F35 was chosen for both the RAF and the RN. Like the Typhoon, the F35 is new technology. Its current problems arise from the fact that it is effectively a technology demonstrator. Opting for the F18 option, however attractive in the short term, would not prove any cheaper. It would also encourage the Treasury to delete the UK's purchase of F35 as we had the desired capability. The F18 is due out of service in the 2030 time frame. By this time (it is to be hoped) F35 would be maturing in service.

 

It should also be remembered that the UK is a Tier 1 participant in the JSF / F35 programme. Britain is already operating 3 F35B variants for trials and testing. British industry will benefit from the work share arrangements for the world wide sales of the aircraft. This keeps the UK in the manned aircraft business, at least into the foreseeable future. It illustrates again the perils of multi-national programmes. The primary development of this aircraft is being done in the US. As with A400M and Typhoon the UK is reliant on the successful outcome of multi-national programmes for critical capability.

 

The up-side is that both of Britain's fast jets, Typhoon and F35, will be fifth generation and able to outmatch any opposition. The decision by MOD to reverse the previous reversal may be embarrassing but Phillip Hammond will not have any qualms about taking this one on the chin. It will annoy our French allies who were hoping to be able to benefit from the synergies of operating fixed wing capability with the UK. Above all, it avoids a potentially bigger muddle of cost and delay further down the line.

 

The F35B is less capable than the F35C due to the need to fit a lift fan to provide the vertical lift. This affects all of the critical parameters of the aircraft's performance: weight, range and weapon load. This will need to be managed. It is more important that the UK gets a carrier strike capability sooner, rather than later. This decision looks like the right one to achieve this.

The Government announcement earlier today said :

In the face of unacceptable cost growth and project delays, the Government has today announced its decision to deliver Carrier Strike capability using a different type of Joint Strike Fighter (JSF) jet.

The MoD will move away from the Carrier Variant (CV) JSF and our Armed Forces will instead operate the short take-off and vertical landing (STOVL) variant JSF.

Defence Secretary Philip Hammond explained to the House of Commons that this decision had to be made now because: sticking with the Carrier Variant would delay Carrier Strike by t least three years to 2023 at the earliest; The cost of fitting catapults and arrestor gear ("cats and traps") to the Queen Elizabeth Class Carrier to operate
CV aircraft has doubled from around £1BN to £22BN; and the STOVL aircraft offers the UK the ability to have an aircraft carrier available continuously. Although no decision on budgeting for crew and support costs will be taken until the next Strategic Defence and Security Review (SDSR) in 2015, the second carrier would be able to provide capability while the first vessel is in maintenance.

The STOVL aircraft has made significant progress since the SDSR as published over 18 months ago. The US Marine Corps has conducted successful STOVL flights from their ships; the UK will receive our first STOVL aircraft this summer; the Queen Elizabeth iis due to arrive for sea trials in early 2017 and we now plan to start our STOVL flight trials off the HMS Queen Elizabeth carrier from 2018.

The UK will also benefit from full interoperability with the US Marine Corps and the Italian Navy – both of which operate the STOVL aircraft.

Defence Secretary Philip Hammond said: "The 2010 SDSR decision on carriers was right at the time, but the facts have changed and therefore so too must our approach.
This Government will not blindly pursue projects and ignore cost growth and delays. Carrier Strike with "cats and traps"; using the Carrier Variant jet no longer represents the best way of delivering carrier strike and I am not prepared to tolerate a three year further delay to reintroducing our Carrier Strike capability. This announcement means we remain on course to deliver Carrier Strike in 2020 as a key part of our Future Force 2020.

Chief of the Defence Staff, General Sir David Richards, said: "Our Armed Forces have a successful history of operating short take-off and vertical landing aircraft and our pilots are lready flying trials in this variant of the Joint Strike Fighter alongside our US allies. These stealth aircraft will be the most advanced fast jets our Armed Forces have ever operated and I know they will do so with the greatest skill and professionalism."

In Parliament, the Secretary of State for Defence (Mr Philip Hammond) said:

With permission, Mr Speaker, I would like to make a statement on the carrier strike programme. The strategicdefence and security review considered the carrier strike
 programme, put in place by the previous Government, as part of a wide-ranging review of options for delivering effective future defence while dealing with the black hole in Labour’s defence budget and the unaffordable “fantasy” equipment plan bequeathed to us by the Labour party. While the review confirmed that carrier strike would be a key capability in delivering Future Force 2020, it also recognised the unsustainability as a whole of the defence equipment plan we inherited.

The strategic decision on carrier strike that emerged from the SDSR process was to convert one carrier with catapults and arrester gear to operate the carrier variant of the joint strike fighter, facilitating greater interoperability with allies, with a decision on the future use or disposal of the second carrier to be taken at the 2015 SDSR. The decision was also taken routinely to embark 12 fast jets while retaining the ability to surge up to the previously planned level of 36 aircraft. As the House would expect for such a complex and high-value project, the strategic decision taken at SDSR was followed by the commissioning of a detailed programme of work to look at the costs, risks and technical feasibility of all aspects of the proposed solution. That study was expected to take 18 months, completing by the end of 2012.

Since I took on the role of Defence Secretary in October last year, my overriding concern, after current operations and the welfare of our armed forces, has been to ensure the deliverability of the MOD’s equipment plan and the achievement of a balanced and sustainable budget. That will give our armed forces the assurance they need to carry out the massive transformation that will deliver Future Force 2020—the concept for our armed forces set out in the SDSR. The carrier project is a large element of the equipment programme, and I have worked closely with the new Chief of Defence Matériel, Bernard Gray, to assess the technical and financial risks involved in it.

It quickly became clear to me that a number of the underlying facts on which the SDSR decision on carriers was based were changing. First, as the programme to convert a carrier to operate with a catapult system has matured, and more detailed analysis has been carried out by suppliers, it has become clear that operational carrier strike capability, using the “cats and traps” system, could not be delivered until late 2023 at the earliest—considerably later than the date envisaged at
the time of the SDSR of “around 2020”. Britain’s carriers will have all-electric propulsion, and therefore will not generate steam like nuclear-powered vessels, so the catapult system would need to be the innovative electromagnetic version, EMALS—the Electromagnetic Aircraft Launch System—being developed for the United States navy. Fitting that new system to a UK carrier has presented greater design challenges than were anticipated.

Secondly, and partly as a result of the delayed timetable, the estimated cost of fitting this equipment to HMS Prince of Wales has more than doubled in the past 17 months,
rising from an estimated £950 million to about £2 billion, with no guarantee that it will not rise further. Given the technical complexity involved and given that the cost of
retrofitting “cats and traps” to HMS Queen Elizabeth—the first carrier out of build—would be even higher, it is unlikely that she would ever, in practice, be
converted in the future. Thirdly, at the time of the SDSR there was judged to be a very significant technical risk around the STOVL—short take-off, vertical landing—version of the joint strike fighter, and some commentators were speculating that it could even be cancelled. Indeed, the STOVL programme was subsequently placed on probation by the Pentagon However, over the past year, the STOVL programme has made excellent progress and in the past few months has been removed from probation. The aircraft has now completed more than 900 hours of flying, including flights from the USS Wasp, and the US marine corps has a high degree of
confidence in the in-service date for the aircraft. The balance of risk has changed, and there is now judged to be no greater risk in STOVL than in other variants of JSF.

Fourthly, further work with our allies on the best approach to collaborative operation has satisfied us that joint maritime task groups involving our carriers, with
co-ordinated scheduling of maintenance and refit periods, and an emphasis on carrier availability, rather than cross-deck operations, is the more appropriate route to optimising alliance capabilities.

When the facts change, the responsible thing to do is to examine the decisions you have made and to be willing to change your mind, however inconvenient that may be. It is about doing what is right for Britain, not burying your head in the sand and ploughing on regardless, as the previous Government all too often did. A persistent failure to observe that simple principle is at the root of many of the MOD budget problems that we inherited from the Labour party, and I do not intend to repeat its mistakes.

The  decision taken in the SDSR to proceed with a carrier strike capability, despite the massive challenges we faced with the MOD’s budget, was the right decision. The
decision to seek to contain costs by going for “cats and traps” on a single carrier, with greater interoperability ith allies, and the cheaper carrier variant version of the JSF
aircraft was also the right decision, based on the information available at the time. However, the facts have changed, and I am not prepared to accept a delay in regenerating Britain’s carrier strike capability beyond the timetable set out in the SDSR. And I am not prepared to put the equipment plan, which will support Future Force 2020, at risk of a billion-pound-plus increase in the carrier programme and unquantifiable risk of further cost rises.

So, I can announce to the House today that the National Security Council has decided not to proceed with the “cats and traps” conversion, but to complete both
carriers in the STOVL configuration. That will give us the ability to use both carriers to provide continuous carrier availability, at a net additional operating cost averaging about £60 million per year. As we set out in the SDSR, a final decision on the use of the second carrier will be taken as part of SDSR 2015. We will switch the order for JSF aircraft from CV to STOVL, which we can do without delaying delivery and, by making this announcement today, we can plan on the basis of the first operational aircraft being delivered with a UK-weapons-fit package.

We expect HMS Queen Elizabeth to be handed over to the Navy in early 2017 for sea trials. We expect to take delivery of our first test aircraft in July of this year, and we
expect the first production aircraft to be delivered to us in 2016, with flying from the Queen Elizabeth to begin in 2018, after her sea trials are complete.

We have discussed this decision with the French Government and with the United States. The French confirm that they are satisfied with our commitment to jointly planned carrier operations to enhance European-NATO capability. The United States, on whose support we would rely in regenerating either type of carrier capability, has been highly supportive throughout the review and I would like to record my personal thanks to the Secretary of Defence, the Pentagon, the navy and the marine corps for their high level of engagement with us. I spoke to Secretary Panetta last night and he confirmed the US’s willingness to support our decision and its view that UK carrier strike availability and our commitment to the JSF programme are the key factors. The Chief of the Defence Staff and his fellow chiefs of staff—all of them—endorse this decision as the quickest and most assured way now to deliver carrier strike as part of an overall affordable equipment programme that will support Future
Force 2020.

This was not an easy decision to take, but our responsibility is to make the right decision on the basis of the facts available to us. Neither I nor any of my colleagues came into government expecting decisions to be easy or pain-free. I have a responsibility to clear up the financial mess we inherited in the MOD, just as we are clearing up the mess we inherited across Government as a whole, and to set a balanced budget and an affordable, deliverable equipment programme with manageable and bounded risk. This decision addresses one of the last impediments to my announcing the achievement of those objectives to the House, and I hope to be able to do so very soon.

This is not just about balancing budgets, critical as that is. It is about the UK’s defence, secured by an appropriate and sustainable military capability. This
announcement delivers an affordable solution to securing that capability and, with two useable carriers, gives us the option of continuous carrier availability. It confirms the expected delivery of the first test aircraft this summer, of the first production aircraft in 2016, of the first carrier into sea trials in 2017 and of the first flight of the JSF from the deck of the carrier in 2018, with an operational military capability in 2020. It confirms the support of our principal allies, the US and France, and that of
the defence chiefs. It shows that we, at least, are not afraid to take difficult decisions when they are right for Britain and I commend the statement to the House.


Mr Jim Murphy (East Renfrewshire) (Lab) - Shadow Secretary of State for Defence:
I thank the Secretary of State for his
statement. Let me start by saying again that when the Government do
the right thing on defence they will have the support of Labour
Members. In politics, however, one can often judge what a
Government genuinely feel about their own policy not just by what
they say but by when they say it. They have told the media that
this is positive news and yet they announced it here in the Commons
the very first day after the council election defeats. It must be
the first ever example of a Government waiting until the polls
close to announce good news.
It is worth reminding the Secretary of State
how he got here. The Government were elected promising a bigger
Army but are delivering the smallest Army since the Boer war, they
have curtailed anti-piracy duties owing to Royal Navy cuts and the
RAF has lost long-term surveillance capabilities. On the defence
budget, decisions this Government have taken have increased costs.
Changes to the Astute class submarines added a further £200
million and the carrier U-turn has cost up to £250 million.
On top of that, they are failing on reform with the defence
procurement plan delayed for two years. Last year, the largest
defence programmes were delayed by a combined 30 months adding
£500 million to their costs and while hundreds of defence
workers across the country are losing their jobs the Government
have no defence industrial strategy to speak of whatsoever.
The biggest blow to the Government’s
defence credibility is this chaotic carrier programme. Standing at
the Dispatch Box, the Prime Minister announced his plans to U-turn
on Labour’s carrier strike policy, scrap the Harriers, sell
Ark Royal, build two carriers but mothball one, sack trainee pilots
and downgrade British sea power. But that U-turn has now come full
circle. Nothing has been gained and two years have been wasted. In
tough times, £250 million have been squandered while the
forces are having their allowances cut. Harriers are being sold to
the Americans for a fraction of their value, we are subject to
international ridicule and there will be no jets on carriers for a
decade. Mr Speaker, you do not have to be a military strategist to
know what aircraft carriers are meant to carry—the clue is in
the name.
The Government say their policy is cheaper,
but it is more expensive. They said there would be interoperability
with the French but their chosen jet cannot land on the French
carrier. The Prime Minister personally derided a policy that he is
now defending. The Government said that Britain did not need jump
jets and Ministers scrapped the expertise needed to operate STOVL
aircraft only now to decide to buy a new fleet of jump jets. We now
need to retrain people and redevelop the skills that were so
carelessly cast aside just two years ago. That is as incoherent as
it is ludicrous.
The Secretary of State’s defence today
is that the facts have changed, but that is not the full story. I
know the advice that the Prime Minister received—that the
defence review policy was high risk and high cost—but the
Prime Minister overruled that. The Public Accounts Committee warned
of rising costs, the National Audit Office said that the Government
had an “immature understanding” of the costs, and the
Select Committee on Defence warned against strategic shrinkage. The
Prime Minister’s decisions have cost British time, British
money, British talent and British prestige.
I know the Secretary of State always likes to
blame someone else, and he has done that again today. He recently
accused British families of causing the financial crash, but he
cannot scapegoat the former Defence Secretary for this decision. He
has to take some responsibility for the Prime Minister’s
mistakes. The Secretary of State has carefully nurtured a
reputation as a spreadsheet king who is most at home over his
paperwork, so he needs to share some of it with us today. Will he
publish a full breakdown of the costs of the plans being abandoned?
Will he confirm that the cost of the U-turn is greater than the
income from the sale of the Harrier jump jets? How many of the new
aircraft does he plan to purchase? Will he confirm that Ministers
were warned 18 months ago about the risks and costs inherent in
this decision? If Britain will have two aircraft carriers, will the
Royal Navy have to increase the number of its personnel? Finally,
there is another question that the Secretary of State did not cover
in his statement: what will now be the total cost of the carrier
build programme?
In conclusion, the Secretary of State has said
the Government will do the right thing when the facts have changed,
but the previous Labour Government got things right whereas this
Government’s policy has unravelled. In recent weeks we have
seen incompetence piled upon political hubris. Only a Government
who started a petrol crisis when trying to avoid one and whose idea
of putting more police on the streets is having thousands
demonstrating outside Parliament would have a policy of building
two carriers, mothballing one immediately, selling the Harriers and
having no planes to fly off aircraft carriers for a decade.
Describing the Government’s defence strategy as an
“omnishambles” would be a compliment. It is time the
Prime Minister started to take responsibility. He should be at the
Dispatch Box apologising for his and his Government's
incompetence.

Mr Hammond:
Before the right hon. Gentleman climbs too far
up his high horse, perhaps we should, to give a bit of context,
remind ourselves of the role that his party played in the history
of this project. It was Labour’s fiscal incontinence that
created the black hole that we are trying to climb out of and
Labour’s decisions that left us facing the challenges we
faced at the time of the strategic defence and security review. It
was Labour that ordered two 65,000 tonnes carriers, three times the
size of a typical STOVL carrier, without cats and traps.
It was Labour who let the contracts on a
sweetheart deal, which meant that cancelling the second carrier
would have cost more than going ahead and building it. It was
Labour who ordered the ships without having the money to pay for
them, and then drove costs of £1.6 billion into the carrier
programme by delaying the build to accommodate a £250 million
cash-flow problem—a performance described by the Public
Accounts Committee as setting
“a new benchmark in poor corporate
decision making.”
Let me turn to the couple of specific
questions buried at the end of the shadow Defence Secretary’s
rant. He asked me about the timing of the statement. I have come to
the House at the earliest possible date after the National Security
Council took the decision to make the change. He said that
£250 million has been squandered. I tell the House frankly
that expenditure has been incurred in appraising the option of
building a CV carrier and fitting it with cats and traps, but it
has been nowhere near the £250 million that the right hon.
Gentleman referred to. He asked me if I would publish details of
the costs involved.

Mr Murphy:
You don’t know.

Mr Hammond:
The right hon. Gentleman says that I do not
know. If he had ever been a Defence Minister, or inside the
Ministry of Defence, he would understand why I do not know. These
are complex contracts. I can give him an approximate idea. We think
the cost of the design work that has been carried out and the
appraisal work will be between £40 million and £50
million. There may also be some exit costs payable to the US
contractors responsible for the EMAL system. We will be negotiating
around those issues, and I give the right hon. Gentleman this
commitment: once we have a definitive figure, I will make it
available to the House.
The right hon. Gentleman said that we will
have no jets on our carriers for a decade. I do not think he was
listening to the statement. We will take delivery of the first test
aircraft this year. We will receive the first STOVL variant
aircraft in 2016 for operation off land. The carrier will go into
sea trials in 2017 and, as soon as she has completed them in 2018,
flights will begin from the deck of HMS Queen Elizabeth. It will
take us two years to work up full military operational capability,
but it is important that the hon. Member for North Durham (Mr
Jones), who is shaking his head, understands what that means. It is
the gap between getting from the point when we fly the jets off the
carrier to the point when the military are satisfied that we have
full operational capability.
The right hon. Gentleman asked about the
number of aircraft that we will be purchasing. The plans for
deployment of aircraft have not changed as a result of this
announcement. We will routinely embark 12 aircraft and we will be
able to surge that number to 36. On the purchasing of aircraft in
the joint strike fighter programme, I can tell him that there is no
requirement for us to go firm with numbers at this early stage of
the programme. Where we can retain optionality, we will do so, as
part of prudent budget management.
The right hon. Gentleman asked about risks and
costs in this project and in the carrier variant project. We are
talking about a project with a total cost of around £10
billion. It is hugely complex, probably the second largest
industrial project under way in this country today. There will
always be risks, and there will always be risks of cost escalation
in such a project. The challenge is not to eliminate risks, but to
manage them. That is what proper management of the Ministry of
Defence is all about.
The right hon. Gentleman asked about the
operation of two carriers. If at the next strategic defence and
security review, the Government and the National Security Council
take the decision to operate two carriers in order to give us
continuous carrier availability, there will be an additional cost
of about £60 million a year on average for additional crewing
and maintenance to keep the two carriers in high readiness.

Dr Liam Fox (North Somerset) (Con):
Will the Secretary of State accept that there
were two optimal mixes for JSF and carrier? We could either have a
65,000 tonne carrier and use the carrier variant, with a longer
range and bigger payload, or, as the American marine corps are
doing, choose the jump jet variant and have smaller carriers. Is
the position we are in today sub-optimal, and not the result of
industrial policy leading military policy? Does he accept that the
real difference, and the reason why he has come to this decision,
is that the extra time required for the EMAL system to be put in
actually breaches the risk that we were willing to take at the
SDSR?

Mr Hammond:
My right hon. Friend is absolutely right that
at the SDSR, a view was taken about the amount of risk that was
tolerable, about the horizon to which we could accept an absence of
carrier capability and, as I have said, I am certainly not prepared
to see us go beyond 2020 without the carrier strike capability.
My right hon. Friend is absolutely right. This
is the question for Opposition Members to answer: why did they
order two 65,000 tonne carriers without cats and traps, which
anyone involved in naval aviation operations knows is itself an
absurdity? [Interruption.]

Mr Speaker:
Order. I appeal to the House to calm down. The
hon. Member for North Durham (Mr Jones), assisted by his
colleagues, is chuntering repetitively from a sedentary position,
in breach of the conventions of the House. I ask the hon. Gentleman
to exercise what modicum of self-restraint he is able, in the
circumstances, to muster.

Mr Hammond:
We inherited this programme, and frankly I am
not interested in trading insults with the Opposition about what
happened in the past. What I need to do now is take the carriers
that are in build and that are being built under a contract that
makes it more expensive to cancel them than to complete them, and
put them to the best possible military use for the defence of this
country.

Mr Bob Ainsworth (Coventry North East)
(Lab):
The Secretary of State has taken, and is
announcing, the right decision today, and I understand how
difficult it is to perform that kind of U-turn and how
uncomfortable it must be. But I cannot go along with him on the
excuse—the reason—that both he and the Prime Minister
decided to give for that decision. That is that the facts have
changed and therefore we are changing the decision.
I reviewed this decision, taken by my
predecessors. The fundamental facts were there at the time and have
not changed. We have been up an extremely expensive cul-de-sac for
the last 18 months as a result of a shambles of an SDSR, and I can
only congratulate the Secretary of State on bringing some sanity to
it; but he ought to understand the problem that he will give
himself in sorting out procurement work—which, yes, is
problematic and was in our time—if he cannot find a way of
being straight about why the decision is being taken and the fact
that the previous decision was taken in the face of clear advice to
the contrary.

Mr Hammond:
I refute that last comment absolutely. The
right hon. Gentleman is in a better position than many in the House
to understand the complexities and the challenges of defence
procurement, but to say that the facts have not changed is simply
wrong. The risk profile of the STOVL aircraft is dramatically
different now from what it was in 2010, when there was a very real
risk that the variant would be cancelled. The cost estimates for
fitting the EMAL system, and the understanding of the complexity of
that task, have matured through the work that we have done since
the SDSR. Although I am grateful for the right hon.
Gentleman’s endorsement of the substantive decision, he is
simply wrong when he says the facts have not changed.

Mr James Arbuthnot (North East Hampshire)
(Con):
To make an announcement like this takes real
courage and I commend the Secretary of State, and the Prime
Minister, for making what I agree with the former Secretary of
State is the right decision. Is my right hon. Friend able to say
how much it would have cost to have converted the second carrier to
cats and traps, because was there not a real risk that we would end
up with a carrier that we could neither use nor sell?

Mr Hammond:
My right hon. Friend is correct to focus on
that point, and I thank him for his comments. As I think I said in
my statement, fitting cats and traps retrospectively to the Queen
Elizabeth, after her completion, would undoubtedly be significantly
more expensive than even the current £2 billion estimate for
fitting them to the Prince of Wales in build. It is therefore not
unreasonable to think of a likely cost of between £2.5
billion and £3 billion for retrospective fit to the Queen
Elizabeth, making that project, as I suggested in my statement, in
practice unlikely ever to occur.

Stewart Hosie (Dundee East) (SNP):
Can the Secretary of State confirm that the
terms of business agreement signed in 2009 provide that on
completion of the carrier build, the UK will be spending perhaps
only £230 million a year—0.7% of the MOD
budget—to maintain essential shipbuilding skills? More
important, will he tell us whether, as a result of the additional
costs announced in today’s statement, he envisages that very
small figure being reduced further in the future?

Mr Hammond:
The hon. Gentleman is absolutely right: the
terms of business agreement with the shipbuilding consortium
commits the MOD to underwriting overhead costs of about £230
million a year to maintain skills. The challenge for the MOD is so
to manage the shipbuilding programme as to recover as much of that
as possible. After the carrier programme is finished in the
shipyards covered by the TOBA, we will move on to the Type 26
programme and recover costs in that way. As far as I am aware,
there is no mechanism for reducing that £230 million—it
is a contractual figure.

Sir Menzies Campbell (North East Fife) (LD):
Is it not abundantly clear that any discomfort
or embarrassment the Government may feel is more than outweighed by
the fact that the decision the Secretary of State has announced
today is right both tactically and strategically? When the sound
and fury have died down, that is what will concern those members of
the Royal Navy who have the responsibility of looking after these
ships and the aircraft that fly from them. Is it not important that
today’s announcement will help to close earlier the yawning
gap in capability left by the decommissioning of the Harrier
aircraft and the carriers from which they were deployed? That shows
commendable flexibility on the part of the right hon. Gentleman. I
hope he will show the same flexibility in respect of other matters,
not least, for example, the role of the Royal Air Force at Leuchars
in my constituency.

Mr Hammond:
I knew my right hon. and learned Friend would
get that in somewhere, but I thank him for his question. In the
interest of tri-service harmony, I should make it clear that
responsibility for the aircraft will be a combined responsibility
of the Royal Navy and the RAF.
My right hon. and learned Friend refers to the
Harrier question. Perhaps I need to remind him that it was the
previous Government who sealed the fate of the Harrier in 2006,
when they scrapped the Navy’s FA2 Sea Harriers, leaving only
the ground attack version; and then in 2009 cut the size of that
fleet, so that by the time of the SDSR in 2010 the fleet was simply
too small to sustain operations in Afghanistan, never mind in Libya
as well. We therefore had to take the difficult decision to end the
Harrier’s service with the Royal Navy in order to sustain the
Tornado, which continues to serve in Afghanistan and which
acquitted itself so well in Libya.

Derek Twigg (Halton) (Lab):
I agree that the Secretary of State has made
the right decision, particularly given the current financial
climate, but I want him to clarify a comment he made. He said that
the option of cancelling the carrier programme was not open to him.
If it had been open to him, would he have cancelled it?

Mr Hammond:
The SDSR in 2010 considered the possibility of
cancelling the second carrier, to deal with the huge budget
challenges we inherited, but the terms of business agreement was
such that cancelling the carrier at that point would have cost more
than delivering it.

Penny Mordaunt (Portsmouth North) (Con):
I have long argued that if we are going to
spend money on carrier strike force, we need to ensure that we have
that capability all year round. Can the Secretary of State confirm
that, in terms of capability, one advantage of the programme he has
announced today is that it puts two operational carriers back on
the table?

Mr Hammond:
My hon. Friend is right. I made the precise
point, in response to my right hon. Friend the Member for North
East Hampshire (Mr Arbuthnot), that the cost of converting the
second carrier to EMALS cats and traps was likely to be
prohibitive; that has emerged from the work that has been going on.
Completing the two carriers in STOVL configuration gives us
optionality. It means that they can both operate the STOVL
aircraft; that the 2015 SDSR can decide whether to bring the second
carrier out of extended readiness and deploy it during periods of
refit or extended maintenance of the first carrier; and that
subsequent SDSRs can decide whether finding the extra crew and
meeting the maintenance cost is an appropriate use of naval
resources, depending on our assessment of the threat risk.

Ms Gisela Stuart (Birmingham, Edgbaston)
(Lab):
I am still trying to understand precisely what
the new facts are that the Secretary of State so recently
discovered. He mentions risk profiles and cost estimates, but
surely they were known. Would it not be wise of him either to be
more specific or, even better, to publish the advice that would
show us what those new facts are?

Mr Hammond:
The hon. Lady will remember that I spent three
and a half years in a shadow Treasury brief, during which time I
developed a healthily jaundiced view of the Ministry of
Defence’s procurement process. Now that I am inside the
Department and see the process from the other side, I understand
that it is a little bit more complicated than nipping down to the
local supermarket to buy a carton of eggs or a bottle of milk.
These are immensely complex projects. The way they typically work
is that they start with a high-level estimate, informed by the best
information available. One then commits funds—this costs
money—to do a more detailed appraisal that identifies the
technical and financial challenges and risks around the project.
That is precisely what we have done. In terms of the appropriate
management of a large, complex project, the MOD has followed
exactly the right process. It has delivered us the facts to which I
referred, and we have drawn the appropriate conclusions from
them.

Mr Tobias Ellwood (Bournemouth East) (Con):
The Opposition should show a little more
humility and gloat less on the subject of their responsibility
towards the Royal Navy. It was Labour that quibbled over the design
for 10 years, and Labour that told the workers to down tools, which
cost £1.6 billion. It was Labour that sacked the Sea
Harrier—and indeed the Ark Royal—and Labour that cut
the number of Type 45s from 12 to six. That is the maritime legacy
that this Government have inherited.

Mr Hammond:
I agree.

Mr Speaker:
We can leave it at that. I am grateful to the
hon. Member for Bournemouth East (Mr Ellwood), but in future, a
question mark would be appreciated.

Nick Smith (Blaenau Gwent) (Lab):
Will the Secretary of State confirm if he has
investigated whether Mr Adam Werritty met any companies or
lobbyists involved in the original very bad decision?

Mr Hammond:
I have answered a number of parliamentary
questions on the information that the Department holds on meetings
held by, and contacts made with, Mr Werritty. As far as I am aware,
I have disclosed in parliamentary questions the full extent of the
Department’s knowledge.

Oliver Colvile (Plymouth, Sutton and
Devonport) (Con):
Amphibious capability is a key part of our
defence strategy. I thank my right hon. Friend for making sure that
we clarify the timetable, but will he explain what impact the
decision will have on amphibious capability, so that we can ensure
that our Royal Marines are protected when they go on to land?

Mr Hammond:
The STOVL configuration of the carrier in the
carrier-enabled power projection model means that the carrier will
embark both fast jets and helicopters—Chinook, Lynx and
Merlin. It will also be able to embark Marines. It is a very large
ship, as we have mentioned this morning. It will have the
capability to carry troops and embark helicopters and fast jets in
a way that will facilitate amphibious warfare.

Thomas Docherty (Dunfermline and West
Fife) (Lab):
Even a first-week midshipman could tell the
Prime Minister that adopting two 180° U-turns takes us back to
where we started two years ago. Will the Secretary of State give a
commitment that the Government will continue to stand beside the
use of Rosyth dockyard for the long-term maintenance of the
carriers when they enter service? Will he tell the House what we
will achieve, except squandering he knows not how many millions of
pounds, by flogging our Harrier fleet for spare parts for a
peppercorn, scrapping a generation of fast-jet Harrier pilots, and
leaving the nation with—

Mr Speaker:
We have got the gist. I am most grateful to
the hon. Gentleman.

Mr Hammond:
A first-week midshipman could probably tell
the hon. Gentleman that it is not normal to order a 65,000 tonne
STOVL carrier without any cats and traps. With regard to the hon.
Gentleman’s question on Rosyth, no decision has been taken on
where the carriers will be maintained in future.

John Glen (Salisbury) (Con):
It is widely alleged by some that the
through-life costs of the F-35B could compare unfavourably with
those of the F-35C. What rigorous assessment has my right hon.
Friend undertaken to ensure that we achieve value for money, having
made this decision, and what wider lessons on the defence budget
can be drawn for similarly important and large decisions in
future?

Mr Hammond:
To answer the last question first, I am
drawing some very interesting conclusions about how to manage the
defence budget on an ongoing basis and hope to share them with the
House shortly. It is precisely because the F-35C variant, on the
face of it, has a lower purchase cost and a lower through-life
maintenance cost that this option was pursued at the time of the
SDSR 2010, but operating the carrier variant will of course require
the installation upfront of the catapults and arrester gears, which
we now know will cost in the order of £2 billion and rising.
On the basis of a properly discounted cash-flow analysis over 30
years, I am clear that the STOVL variant, given the current
estimate of the cost of cats and traps, will now be cheaper.

Jason McCartney (Colne Valley) (Con):
At the Royal Air Force officer training
college at Cranwell we were taught that flexibility is the key to
air power. I congratulate my right hon. Friend on showing the
flexibility to make the right decision for our nation and our
future military capability. Will he confirm that his decision has
the support of the Chiefs, unlike the previous Government’s
decision to scrap the Sea Harriers, which reportedly led to two of
the Chiefs standing down?

Mr Hammond:
I am very clear that my job is about
supporting the military and our armed forces in defending our
country. When I make decisions, I will work with the Chiefs to
reach an outcome that works for the military. I can confirm that
the Chief of the Defence Staff and all three single service Chiefs
support the decision and have confirmed their support in writing to
the Prime Minister.

Mark Lancaster (Milton Keynes North)
(Con):
Those on the Labour Front Bench have short
memories. The pages of Hansard will show the debate that the hon.
Member for North Durham (Mr Jones) and I had in 2009 on the
previous Government’s decision to withdraw the Harrier from
Afghanistan prematurely so that it could be subjected to the
programme review the following year and potentially cut. Of course,
that is now ancient history and they seem to have forgotten it. I
commend my right hon. Friend for his brave decision, which is
undoubtedly the right one, to minimise the capability gap for
carrier strike. Will he confirm that the STOVL version is easily a
superior aircraft to the Harrier it replaces and equally comparable
to anything it might meet in the air?

Mr Hammond:
I am grateful to my hon. Friend for raising a
point that perhaps I should have made before. The STOVL
variant—indeed, any variant of the JSF—is a
fifth-generation aircraft and represents a step change in
capability. It is a stealth aircraft with an autonomous
intelligence-gathering capability, and the STOVL variant has
significantly greater range than the Harrier had. It is an aircraft
with greater capability, greater range than the Harrier and a range
of capabilities that previous generations of aircraft simply did
not have.

Andrea Leadsom (South Northamptonshire)
(Con):
I have received a good deal of correspondence
from constituents, both those serving in and those retired from the
armed forces, who for a long time have expressed huge concern about
the strategy and direction of our procurement. They will be
relieved and delighted to hear today that my right hon. Friend has
been able to continue to assess the strategy and come up with the
right decision and brave enough to announce it to the House. Will
he reassure the House that he will never let the woolly thinking
and loose purse strings shown by the previous Government undermine
our armed forces again?

Mr Hammond:
My hon. Friend makes an important point.
Fiscal incontinence undermines the support that we can offer our
armed forces. Doing this in a disciplined way is not, as the right
hon. Member for East Renfrewshire (Mr Murphy) would try to present
in a rather sneering fashion, some sort of obsession with
spreadsheets; it is about doing our job as politicians, which is to
ensure that the support for our armed forces is there, is
sustainable and can actually be delivered to them.

Alun Cairns (Vale of Glamorgan) (Con):
The Ministry of Defence has a long and tawdry
history of overspend in procurement, timelines that are well in
excess of those originally planned and of ploughing on regardless.
Will the Secretary of State confirm that his decision today
demonstrates a change of culture that really shows that we are
getting to grips with the budget and the timelines to provide
guarantees to the armed forces and our nation?

Mr Hammond:
I thank my hon. Friend for his question and
assure him that we will take the decisions that need to be taken in
the interests of the nation’s defence, however awkward or
inconvenient. I will come to the House however many times I need to
and make however many announcements I need to make to get the
Department back on track. I want the MOD to stand tall among the
Departments of State, with a normal relationship with the Treasury
and with the centre of government and proper contingency
arrangements in its budget so that the armed forces can be
confident that the promises that are made to them will be
delivered, unlike those of the previous Government.

Andrew Bridgen (North West
Leicestershire) (Con):
What steps is my right hon. Friend taking on
defence procurement to ensure that the Government do not risk
repeating the mistakes of the previous Government, who even in
their last financial year in office, 2009-10, oversaw a huge
increase of £3.3 billion in the cost of the 15 largest
defence projects?

Mr Hammond:
I think that the announcement I have made
today demonstrates for my hon. Friend and the House that we will
put prudent management of defence projects ahead of playing
politics. It would have been easy to avoid making this decision
today, and politically much less uncomfortable, but this is about
making the right decisions for the future of our armed forces and I
can assure him that that is what we will continue to do.

Comments 

 
0 #1 Terence Johnstone 2014-05-23 11:07
Glad to hear development of the F35B is going well contrary to my belief that there were too many problems to be cured with current technology including hot end swivel bearing lubrication.
Quote
 

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